Shale Oil’s New Investors Want Discipline And A Smaller Environmental Footprint

Shale Oil’s New Investors Want Discipline And A Smaller Environmental Footprint

A more conservative class of investor now commands influence in the shale oil and gas world. Gone are the days when shale oil and gas companies could persuade investors to write checks by simply pumping lots of oil. These days different and more conservative class of investor commands influence in the shale industry, demanding not head-turning oil production figures but consistent shareholder returns, positive free cash flow, and a smaller environmental footprint. "The investor community that stuck with [the shale industry] is the steady ones, that want discipline, that want predictability," said Regina Mayor, global head of energy at accounting firm KPMG, in an interview. "That's the investor base they are all pandering to now. The growth investors are gone." Despite turning America into the world's top oil-producing country, the U. S. shale oil industry succeeded in alienating the investors who enabled its astounding growth. Between 2010 and 2020 the industry had negative net free cash flows of $300 billion, more than the annual revenue of Exxon Mobil, according to a study last year by accounting firm Deloitte. Disillusioned venture capital firms and other high-growth-seeking funds were already exiting the sector before the pandemic, but the virus-caused oil rout accelerated